In an attempt to avoid an all-but-forced merger with Microsoft, Yahoo has taken steps to create a business partnership with fellow search giant Google. But the alliance has antitrust regulators concerned. Legal experts say any deal between the world's two largest Internet search services will draw heavy scrutiny from U.S. and European competition regulators.
In recent years, web search services have taken over from once popular portals or home pages, such as AOL, MSN or Yahoo's own home page, as the primary starting point for many consumers seeking information on the Internet.
Google held a 59.2% share of the U.S. Web search market in February, compared with Yahoo's 21.6% and Microsoft's 9.6%, according to research firm comScore.
To counter that dominance, Microsoft offered in January to buy Yahoo in a cash-and-stock deal now valued at $42 billion, but Yahoo is opposed to that price stating that it's too low. It announced last week a test to outsource search advertising to Google, which sources say is part of Yahoo's plans to form a three-way alliance with Time Warner's AOL to fend off Microsoft.
For more information on the proposed Google/Yahoo partnership on InformationWeek, click here.